Eco (ECOWAS single currency project)

The eco is the planned single currency of the member states of ECOWAS (Economic Community of West African States), fifteen originally and twelve since January 29, 2025, a project whose timetable has been pushed back several times. On December 21, 2019, in Abidjan, Alassane Ouattara announced that the West African CFA franc would become the eco, alongside a reform of the operations account with France. The announcement caught part of ECOWAS off guard, even though the eco was ECOWAS's own project. Eco is the name chosen in June 2019 for the single currency of the Economic Community of West African States, a goal written into the texts for decades and postponed several times. The zone's English-speaking countries, led by Nigeria, criticized WAEMU (West African Economic and Monetary Union) for taking over the name while keeping the fixed peg to the euro and the French guarantee, whereas the community project called for a flexible exchange rate regime. In June 2021, ECOWAS adopted a new roadmap targeting a 2027 launch. Since then, the departure of Mali, Burkina Faso and Niger from ECOWAS, announced in January 2024, has added uncertainty, since those three states remain WAEMU members. An underwriter tracks the file for one specific reason: redenomination risk. If the West African CFA franc changes its name, parity or guarantor, every contract, receivable and policy denominated in XOF (West African CFA franc) will have to be reread. The lex monetae principle holds that a sovereign state sets its own currency, and a foreign court tends to recognize the conversion decided by the issuer. A creditor who lent in XOF can therefore be repaid in a currency under a different regime. For a CPRI (credit and political risk insurance) policy, the question is whether a regime change followed by transfer restrictions would be a covered event or an exclusion. Practitioners will not decide before seeing the switchover texts, and no one has seen them yet.